QANTM Intellectual Property Limited HALF-YEAR RESULTS PRESENTATION 6 - PowerPoint PPT Presentation

QANTM Intellectual Property Limited HALF-YEAR RESULTS PRESENTATION 6 MONTHS TO 31 DECEMBER 2018 22 February 2019 Leon Allen, Managing Director and CEO Martin Cleaver, Chief Financial Officer QANTM Investor Presentation 1

Structure 1. Business and Financial Summary 2. Market and Business Overview 3. Financial Results 4. Business Initiatives and Priorities QANTM Investor Presentation 2

Disclaimer “believe”, “expect”, “project”, “forecast”, “estimate”, “likely”, This presentation has been prepared by QANTM performance and condition. The non-IFRS financial Intellectual Property Limited ACN 612 441 326 (“QANTM” “intend”, “should”, “could”, “may”, “target”, “plan”, information does not have standardised meanings under or the “Company”). The information contained in this “guidance” and other similar expressions. Indications of, the Australian Accounting Standards and therefore may presentation is for information purposes only and has been and guidance on, future earning or dividends and financial not be comparable to similarly titled measures presented prepared for use in conjunction with a verbal presentation position and performance are also forward-looking by other entities, nor should they be interpreted as an and should be read in that context. statements. Such forward-looking statements are not alternative to other financial measures determined in guarantees of future performance and involve known and accordance with the Australian Accounting Standards. No unknown risks, uncertainties and other factors, many of reliance should therefore be placed on any financial The information contained in this presentation is not which are beyond the control of QANTM and its related information, including non-IFRS financial information and investment or financial product advice and is not intended bodies corporate, together with their respective directors, ratios, included in this presentation. All financial amounts to be used as the basis for making an investment decision. officers, employees, agents or advisers, that may cause contained in this presentation are expressed in Australian Please note that, in providing this presentation, QANTM actual results to differ materially from those expressed or dollars and rounded to the nearest $0.1 million unless has not considered the objectives, financial position or implied in such statement. Actual results, performance or otherwise stated. Any discrepancies between totals and needs of any particular recipient. QANTM strongly achievements may vary materially from any forward sums of components in tables contained in this suggests that investors consult a financial advisor prior to looking statements and the assumptions on which those presentation may be due to rounding. making an investment decision. statements are based. Readers are cautioned not to place undue reliance on forward looking statements and QANTM No representation or warranty, express or implied, is made assumes no obligation to update such information. as to the fairness, accuracy, completeness or correctness Specific regard should be given to the risk factors outlined of the information, opinions and conclusions contained in in this presentation (amongst other things) . this presentation. To the maximum extent permitted by law, none of QANTM, its related bodies corporate or its This presentation is not, and does not constitute, an offer shareholders nor their respective directors, officers, to sell or the solicitation, invitation or recommendation to employees, agents nor advisors, nor any other person, purchase any securities and neither this presentation nor accepts any liability, including, without limitation, any anything contained in it forms the basis of any contract or liability arising out of fault or negligence for any loss commitment. arising from the use or application of information contained in this presentation. Certain financial data included in this presentation is not recognised under the Australian Accounting Standards This presentation may include “forward looking and is classified as 'non-IFRS financial information' under statements” within the meaning of securities laws of ASIC Regulatory Guide 230 'Disclosing non-IFRS financial applicable jurisdictions. Forward looking statements can information' (RG 230). This non-IFRS financial information generally be identified by the use of the words “anticipate”, provides information to users in measuring financial QANTM Investor Presentation 3

1 Business and Financial Summary QANTM Investor Presentation 4

Business Summary QANTM continues to outperform the Australian market  Continued evidence of restoration of business trends, following strengthening market conditions in 2H FY18  Favourable 1H performance, including EBITDA growth, expansion of EBITDA margins  Improved contributions across all parts of the business – Total patent applications filed up 10.5% (14.5% including AFIP 1 ) vs 1H 2018; up 9.2% (13% including AFIP) vs 2H 2018 – Australian patent applications (62% of QANTM’s total) up 16.6% vs 1H 2018; up 4.7% from 2H 2018 – DCC Trade Marks re-established #1 market position; service charge revenue up 9.3% (14.8% including AFIP) vs 1H 2018 – Legal/litigation record contribution: strong case load; new legal team contribution; revenue up 41% Expansion of Asian business  Advanz Fidelis (Malaysia) acquisition, integration and initial revenue contribution of $1.1 million  Establishment of FPA Singapore office, complementing DCC presence  25% increase in all-Asia patent applications (exclusive of AFIP) vs 1H 2018; 42% increase vs 2H 2018 (inclusive of AFIP) Potential industry-transforming merger announced with Xenith IP Group  Combines #2 and #3 Australian IP players  Creates a leading Australian position for merged group in terms of IP service offering  Benefits to all stakeholders – customers, employees and shareholders Note 1 Advanz Fidelis IP Sdn Bhd (AFIP) acquired 2 July 2018. QANTM Investor Presentation 5

Financial Summary – Underlying Results 1  Total revenue $55.3 million, up 12.4% (1H 2018: $49.2 million), 10.2% excluding AFIP  Service Charges of $43.0 million, up 13.2% (1H 2018: $38.0 million), 10.7% excluding AFIP  Foreign Associate Charges of $12.3 million, up 9.8% (1H 2018: $11.2 million) (net after recoverable expenses of $1.0 million vs $0.7 million)  Total Net Revenue of $45.1 million, up 13.6% (1H18: $39.7 million)  Total underlying operating expenses $33.4 million, up 10.2% (1H 2018: $30.3 million), 8.6% excluding AFIP  EBITDA pre FX of $11.7 million, up 24.5% (1H 2018: $9.4 million), 19.2% excluding AFIP  EBITDA after FX of $12.2 million, up 29.8% (1H 2018: $9.4 million), 24.5% excluding AFIP  EBITDA margin (on Service Charges Revenue) 28.4% (1H 2018: 24.7%)  Net Profit after Tax $7.5 million, up 36.4% (1H 2018: $5.5 million); statutory $4.6 million (1H 2018: $3.6 million)  Operating cash flow of $3.4 million, down 59% (1H 2018: $8.3 million); $5.1 million tax payments in the half (1H 2018: nil)  Net debt $16.2 million (30 June 2018: $8.3 million); gearing 19.1% (30 June 2018: 10.6%)  Interim dividend of 3.5 cents per share, 100% franked; 1H 2018 dividend of 2.8 cents, 100% franked. Note 1 A reconciliation of statutory to underlying results is included in Slide 21. QANTM Investor Presentation 6

2 Market and Business Overview QANTM Investor Presentation 7

Revenue by Source of Business QANTM REVENUE HALF YEAR TREND 1H 2016 - 1H 2019 60000 50000 40000 30000 20000 10000 0 1H 2016 2H 2016 1H 2017 2H 2017 1H 2018 2H 2018 1H 2019 AFIP PATENTS TRADE MARKS LEGAL/LITIGATION Positive half on half revenue growth • 1H 2019 total revenue of $55.3m increased by 12.4% vs 1H 2018 ($49.2m ) and 5.3% vs 2H 2018 ($52.5m) • Service charge revenue of $43.0m increased by 13.2% vs $38.0m in 1H 2018 and 11.7% vs 2H 2018 ($38.5m) • Associate charges revenue of $12.3m increased by 9.8% vs 1H 2018 ($11.2m). Note: Includes both service charge revenue and foreign associate revenues. QANTM Investor Presentation 8

Business Overview BUSINESS PATENTS AND DESIGNS TRADE MARKS LEGAL / LITIGATION AREAS LIFECYCLE/ADVISORY Lifecycle 54% Percentage of aggregate 18% 66% 16% QANTM Service Charges revenue 1H FY 2019 1 Advisory 12% 1H 2019 vs 1H 2018 • Service Charges Revenue $28.3 m vs $26.3 m $7.8 m vs $6.8 m $6.9 m vs $4.9 m • Service and Foreign $38.4 m vs $35.4 m $10.0 m vs 8.9 m Associates Charges Revenue • Higher QANTM Australian and foreign • Trade mark business growth, • sourced Australian patent business Continued strength in client despite lower filings • Australian domestic patent litigation/ legal work; aided by Main Factors • Strong performance of DCC applications filed up 16.6% initial contribution from new legal Australia trade mark business in • Overall Group patent applications up team generally slower market 10.5% (14.5% including AFIP) • • DCC equal #2 firm DCC #1 individual firm • Market Position 2 DCC legal services • • QANTM #3 group QANTM #2 group Source: DCC, FPA and AFIP management analysis Notes: 1. Excludes Associate Charges. 2. Market position analysis is based on the total number of patent or trade mark applications filed in Australia in 1H 2019 and QANTM Investor Presentation assumes the Group and two additional competitor groups of businesses both operated in their current form. 9